Silicon Valley has played an outsize role in shaping Bill Ford Jr.’s thinking about the future of the auto industry. Although he didn’t know it at the time, two experiences in recent years left signature impressions that would ultimately lead to this weekend’s shakeup at the Ford Motor Company.
The first came toward the end of his tenure as a member of the eBay board of directors, which gave Ford a vantage point into a business culture dramatically different than the one he understood in Detroit. As he watched companies like Tesla Motors and Google gain a foothold on the future, he grasped the magnitude of the changes legacy automakers needed to make to survive, including working with traditional competitors.
“The whole ‘frenemy’ thing in Silicon Valley, that was something very foreign to us,” he told an audience at a Ford Trends conference in September 2016. “It was clear for us in the auto industry who your competitors were. Spending time in the Valley, it was a much more gray situation.”
Ford’s 10-year tenure with eBay so impressed him that he brought the Ford Motor Company’s own board of directors to Silicon Valley for a visit in February 2016. During meetings with leaders from Bay Area companies, he realized one of the automaker’s board members, Jim Hackett, was already familiar with the sweeping cultural shift Ford wanted to inject into his own company.
“We don’t have to cede that to anybody. Tesla, anybody. It’s our right to win there.” – Jim Hackett, Ford CEO
“Every one of them were walking right up to Jim, and they gave him a hug and said, ‘I didn’t know you were on this board,’ ” Ford recalled in a media conference Monday. “The leaders out there said, ‘My gosh, he’s one of the real original thinkers that we know, and you guys are really lucky to have him on your board.’ ”
One experience taught him that seismic changes were ahead. The other taught him that he had a potential answer for them nearby.
Within weeks of those meetings, Ford appointed Hackett to head Ford Smart Mobility, a new subsidiary within the company focusing on future-minded innovations. On Monday, Ford promoted Hackett to a more prominent role, announcing he would succeed the ousted Mark Fields as the Ford Motor Company’s new CEO.
Facebook CEO Mark Zuckerberg took a ride in a Ford Fusion hybrid autonomous research vehicle at Ford’s Product Development Center in Dearborn on April 27, 2017.
In his new role, Hackett will be charged with boosting a stock price that has tumbled roughly 32 percent over the past three years amid Wall Street concerns that the company has lost market share and lagged competitors. Even as he seeks short-term solutions to boost a flagging stock price, Hackett is also charged with ensuring Ford’s preparations for a future based more on broad mobility solutions and less on personal car ownership stay on target.
There were concerns the company had fallen behind in some of those efforts as well, and Hackett and Ford Jr. twice sidestepped questions Monday on whether the company remains on pace to launch a Level 4 autonomous vehicle by 2021. But Ford Jr. broadly acknowledged the company needs to move faster.
“The clock speed at which the world is moving—and our competitors, not just other OEMs—really requires us to make decisions at a faster pace,” he said. “I don’t think we missed any opportunities per se, but if we’re going to win in this new world, we have to move fast and trust people to move fast.
“The execution against the vision has to be quicker.”
Ford Smart Mobility chairman Jim Hackett delivers a TED talk on the future of mobility at Joe Louis Arena in Detroit on Jan. 9, 2017. Hackett was named CEO of the Ford Motor Company on Monday.
Ford has made several investments in that future vision, including a $1 billion investment in Argo AI, a Pittsburgh-based company focused on building artificial intelligence and computer vision for self-driving vehicles, that was announced in February. Last August, the company announced investments in lidar maker Velodyne and Civil Maps, a California company that develops high-definition 3D maps for autonomous vehicles. At the same time, Ford acquired San Francisco–based Chariot, a ride-hailing shuttle service, and SAIPS, an Israeli computer vision and machine-learning company.
Ford has also ramped up staffing in its Smart Mobility subsidiary, growing it from 12 employees at the outset in March 2016 to nearly 600 today, according to Hackett. While the subsidiary will continue to exist on its own, Ford Jr. seemed to regret that such a distinction has been drawn between the main company and the future-focused one.
“If we’re going to win in this new world, we have
to move fast and trust people to move fast.”
– Bill Ford Jr.
Going forward, “We won’t talk a lot about emerging versus core. This is one company,” he said Monday. “Ford Smart Mobility is not the place where new things happen and everything else goes on the way it’s been going on. We don’t want competing groups. We don’t want one group to feel like the cool group and the other to feel like the left-out group.”
A central part of Hackett’s job will be to better integrate the two and communicate to investors a single vision as the company marries ride-hailing products and autonomous vehicles with its bread-and-butter business of selling cars. In that respect, he said, the future is no fantasy. Nor is it one that favors Silicon Valley over legacy automotive businesses.
“The biggest challenge is to have everybody see the future and see their opportunity in that,” he said. “Secondly, it’s our right to win there. We don’t have to cede that to anybody. Tesla, anybody. It’s our right to win there.”